3 Stocks Brewing Blended International Results

Coffee companies that have raised prices to match rising commodity costs over the past few years are set to profit as beans get cheaper thanks to a 28-month low. But more than supply and demand, a look at the international expansions of three major coffee companies offers insight into what works and what doesn't in the global market.

Even in the midst of the economic crisis, and with a national coffee that's rather renowned, Athens has seen its Starbucks (NAS: SBUX) stores in tourist and residential districts seemingly thrive, with full tables, long lines, and both out-of-towners and locals lingering on patios under green umbrellas. Yes, the company's share price has fluctuated a bit lately, but that's more a result of the overall market activity than a reflection on the company at large.

For its most recent quarter, Starbucks reported an increase of total net revenues of 15% to $3.2 billion. Traffic has increased 6%, for an overall same-store sales increase of 7%. EPS also increased 18%, for a $0.06 increase per share compared to the same quarter last year. And the company continues to expand, with 176 net new stores globally, its 3,000th store in the Asia-Pacific, and its first store in Norway.

The Starbucks moat is huge, and internationally it seems to coexist peacefully alongside smaller, independently owned shops. After all, if you want a Greek coffee, you'll go to a mom-and-pop place. If you want a Skinny Frappuccino, Starbucks is your place.

And Starbucks regulars will appreciate that the language of ordering is universal. Walk into a shop in Istanbul, Bali, or Athens, and a grande is a still a grande. Travelers going into caffeine withdrawal after a long flight who don't have to look up the word for coffee in Turkish could keep Starbucks in business on gratitude alone, proving a latte by any other name isn't nearly as sweet.

Poor Tim Hortons (NYS: THI) . The company's balance sheet has more red ink than an essay marked by an overzealous English professor. Seattle's neighbors to the north had a good year in 2010, but it was a bright blip on an otherwise dismal landscape. Despite sales being up 9.4% across the board, the company has had a hard time keeping up with rising commodity costs and has seen growth and net income margins slip recently.

Another red flag for potential investors is the company's unstable leadership. CEO Paul House returned to the Canadian company after former CEO Don Schroeder left last June with little notice, and says he'll stay on until a replacement is found. Downplaying the expansion, House says Hortons isn't looking for a CEO with international experience. That's not good news for the company, which is testing non-North American waters in the Middle East, but still holds itself as a Canadian company first. Since breaking into the Middle East will be a little bit trickier than expansion into the United States, such an omission seems a glaring oversight.

In the face of Starbucks' rapid growth and Tim Hortons' simultaneous embrace and dismissal of its Middle Eastern shops, Caribou Coffee's (NAS: CBOU) announcement that it's opened its 100th international store seems almost charming. The company's Istanbul store, which opened last month, is its sixth in Turkey. The 100 international stores are primarily in the Middle East, and Caribou will be looking to deepen its presence in existing markets before branching into new ones.

Caribou's performance has been mixed, with strong revenue growth and zero debt mixed with a low profit margin and weak earnings. The six shops in Istanbul will face fierce competition from Starbucks, which already has a strong presence there. Luckily, the company won't have much to worry about from Tim Hortons.

It's not just these three coffee stocks that have international ambitions, either. Both McDonald's (NYS: MCD) and Dunkin' Brands (NAS: DNKN) have ramped up their international rush. Dunkin' is adding more stores in India, and McDonald's is making big bets right alongside Starbucks in China. That's just one reason that we've named McDonald's one of the "3 American Companies Set to Dominate the World." You can learn about the other two in our report. Download a copy today on us; it's free for Fools.